Okay. Is everybody ready to go ahead and start? Excellent. Let's go. Perfect. All right, well, I'm going to go off camera and I'm going to officially greet our attendees. Thank you so much for joining us today for this presentation. This NAPA webcast will be 50 minutes long. If we have time for questions during the presentation, we'll certainly do our best to get to them. If we do not get to your question, the questions will be sent to our speakers after the webcast. To receive your continuing education credit, please know you must watch this webcast in its entirety. Please note that if you are watching the event in a group setting and you did not individually log in, your training coordinator needs to confirm your attendance by sending an email to me, Marissa Braccamonte, at mbraccamonte@usaretirement.org, and I can then upload your CE credit. Everyone else will have the CE credit loaded into your transcripts within a few weeks. Two weeks to be exact. There are no slides for this presentation, so no need for handouts. Our topic today is ESG: A Holistic Approach for DC Plans. Our moderator today is Nevin Adams, Chief Content Officer at NAPA. Thank you, Nevin, and I'll let you take it from here. Appreciate it, Marissa, and welcome everybody. Good afternoon, good morning, depending on where you are. Man, we have got a jam-packed full discussion here today. Lots of varying things. I do not care how many presentations you have dialed into on ESG over the last year or so, I can promise you have never seen this much good quality information packed in 50 minutes as we are going to try and deliver here today. When we talk about a holistic approach to this, trust me, this presentation lives up to every bit of that. Welcome here today. I want to remind you, as Marissa mentioned, that if you have got questions during this discussion, it really is a discussion, not a presentation per se, I want to encourage you to use the question box to pop those in. We will try to deal with those as they seem germane, pertinent, whatever. As Marissa also said, if we get to the end and we have not had a chance to pick it up, it will be an opportunity for our panelists to follow back up and provide you some of those answers. Please, by all means, take advantage of it. Can you all hear me? Somebody in the chat room is having trouble. Okay. That is apparently not me, so those of you who are checking in. Anyway, let me start by introducing our esteemed panel today. We have Angela Harrell. Angela, you might want to wave it, but I think it has got your name underneath it. Angela is Senior Vice President, Chief Diversity, and Corporate Responsibility Officer for Voya Financial. Also joining us, we have got Christine Hurtsellers. Christine, hello. Christine is CEO of Voya Investment Management. We are thrilled to have her here as well. Of course, also from Voya, we have got none other than Charlie Nelson, Vice Chairman and Chief Growth Officer. I know many of you on the call know Charlie. Very familiar with him and his work and the things he has done in our industry. The last, but certainly not least, another name that I think many of you have heard of, seen from, or both of the above, and that is Michael Hadley, who is a partner at Davis & Harman LLP. Michael, welcome to you as well. Angela, I want to start off with you today, and talk a little bit about why ESG is important, perhaps even in the context of the great resignation. Why it is important to intermediaries and plan sponsors these days. Thank you so much, Nevin, it is a pleasure to be here with you today. Number one reason why ESG is important is it tells you so much about a company's performance. Not just the performance in the environmental, not just how they govern themselves, but really when you are thinking about all of the ways in which financial services must think about their products and services, at the core are individuals. They are human capital. That is where the S comes through. As I think about why ESG and why is it important, if you think about it from an enterprise level, it is really the umbrella term for all of those things that matter to our plan sponsors, to our business partners around security of data, around cybersecurity, around fair advice and transparency. Increasingly, we all know it's about whether or not companies that you partner with align with you and your values. Whether or not your teams that support your plan sponsors are diverse and representative of America. As we think about how do we continually raise performance, ESG and the way that we run and manage our companies is absolutely core to that. Business partners want to be in relationship and manage partnerships with companies that have stellar reputations because your partner's reputation is actually your reputation. They also are looking to partner with companies that they know are paying attention to the ways in which they run diversity and their other social aspects. I would say right now, that's really the focus. E and then the G are also very important, but I think S is really where you differentiate yourself these days. Ultimately, you're talking about kind of a desire for companies to work with people who are aligned in terms of their values and how they view the world. I think it's aligned in terms of their values, but I think it's beyond the alignment to whether or not these companies are not just saying, but they're doing. Christine, I think I've taken that from you. It's one of the things that Christine says often that I love so much. We can talk about values, and we can have a list of the things that we believe in, but it's really the actions that are taken. ESG is about metrics. It's about measures. It's about very clear objective setting. You can then begin to understand if folks are just talking about the things that they say are important or they're doing. It really is a focus on performance and on strategy. The war for talent, Nevin, you mentioned, more than ever. Every individual is making a decision about Voya. Our plan sponsors are making a decision about Voya. New hires are making decisions about Voya. When they look at our ESG performance, that's what's helping them to determine, this is someone that I want to align and connect myself with because they don't just represent my values. They're actually doing things well and running their business responsibly and right. I think of ESG as the new kind of way of saying corporate responsibility or sustainability. It's all of the responsibility that we have to our planet, to the individuals who we link to throughout our business system, and also to the communities where we serve. That is, I think, one of the things that differentiates companies today. Are they also thinking about where that overlap is between what's good for society and what's good for business? That's where the enterprise ESG strategy really focuses on that nexus. How or does this tie in with another acronym we hear a lot about these days, DEI, diversity, equity, inclusion? Does it tie up with that at all? DEI is ESG. I can't even begin to tell you. That S, the social component, that is where diversity, equity, and inclusion lives. It's about who we have within our company. It's who we're empowering through the business that our company manages and how we're actually helping to bring the underserved, or those who perhaps have been on the margins, into the greater fold. If you think about financial services and you think about DEI, it's about our representation within our own workforce. It's also how are we truly helping with the financial literacy and inclusion of all. We know that there are some who have had advantages historically over others. If you think about DEI from a really comprehensive way, you'll know that it's how you think about who's coming in, how you ensure that you're engaging and empowering and supporting all of the individuals within your organization. Then how are you taking the special skills and knowledge that you have to start to address some of the racial or social or economic issues that actually are part of America and our society. For us, because we are financial services, that is so much about how do we help in terms of that health and well-being, equity and inclusion. It's, I think, an integrated look about how DEI can really change the dynamic and make everyone help everyone have an opportunity at a better financial future. Got it. Well, now we talked about alignment, and we also talked about the importance of doing as opposed to saying, borrowing again, Christine will give you acknowledgments for that. Have you got some examples of some companies in terms of what they're doing as part of this alignment with ESG? I think that most companies, if you think about their environmental, perhaps, claims around wanting to be an environmentally sound company, they may talk a great deal about what they do to help the planet, but are they also doing those things within their own facilities? Are they thinking about the ways that they can also be an environmental citizen? Are they empowering their employees? Again, it always comes back to that S, right? The ecosystem that you're a part of. Are they asking the same of their suppliers from a responsible supplier perspective? Are they asking their employees to think about their own footprint, even when they're working virtually? It's taking the E and the thinking about the planet into the realm of how do we also give people the tools to make a positive difference. Paperless billing or going green in terms of account statements, et cetera. If you think about the S, there are so many wonderful examples of how companies are bringing the S of ESG to life to build a more inclusive workplace. Employee-led councils or employee resource groups are a great example of how do we make sure individuals who are perhaps disabled, or individuals who are from the LGBTQ community, of Asian origin, of African origin, how can we make sure that we're providing a supportive environment and empowering them to be part of the culture of a company? That's another example of what companies do to put that S into action, and to really include all. Inspiring others to be allies, right? Because it's not just about some groups as opposed to others. It's about all of us creating a workplace where people feel comfortable bringing their whole selves to work. Because the thing about diversity is all of us are diverse, every single one of us on this webinar. Sometimes I think when we talk about diversity, people tend to think it's only some people, that gender or that race. It's all of us. We also want to make sure that we're bringing in those who are underrepresented. Our table has all of the backgrounds, opinions, and perspectives around it. Innovation happens then. Creativity happens then. Those teams are stronger, those companies are more profitable, and those companies are more sustainable over time. That DEI, those programs, those initiatives across all E, S, and G, that's what really is that differentiator that our business partners are looking for, and that I get asked about very frequently, when we are having finals presentations and sales presentations. Oh, that's interesting. Let's pivot a little bit. Christine, I want to bring you into this, because we talked about the employer side of this and the intermediate side of this, but ultimately I think a lot of it gets down to participants. What are the participants in these plans, how are they feeling about all of this? What are they expecting? They're the ones who we're trying to keep on board after all, right? Yeah. Absolutely. I think it's really important, and we've seen a big shift in the U.S. as far as people thinking about ESG. I think COVID, some of the social injustice, certainly climate change is becoming more and more apparent to people. Really when you think about that, it's really pulled together that this is becoming more and more top of mind for our plan participants. Within Voya as an example for you, we do proprietary surveys to see where are people at. In our survey, we showed that 83% of American workers feel that it's important for who they work with to apply ESG to how they run their company and their workplace benefits. Again, more and more it's top of mind, and I see this only growing in importance in the weeks, months, and years ahead. Having dealt with participants, employers, and I suppose it's only logical, given the people who are on this call, what are advisors thinking about all this? Where is their head at these days? Yeah. It's the same thing with advisors. Again, when you think about what are they hearing from their clients and how are they engaging and what's important in delivering on client benefits. Really we're seeing an uptick in terms of Defined Contribution advisors who in many respects due to regulation, and we can get at that a little bit later, have had a little bit more of a rough slog as far as clarity, as far as investment selection, and we think good things are on the horizon there. Even advisors focused just on DC, now a third of them are very keenly interested in ESG, and that's growing. Again, within the Voya surveys, that's what we've found. More and more, advisors are actually wanting or showing a very strong preference for something we call ESG integration. When you think about an investment manager product, kind of holistically thinking about the E, the S, and the G in the investment lineup and the funds. Potentially longer term, having specific funds in the lineup. Again, we see advisors right now, they have a preference for a little broader definition. Think about two-thirds of DC advisors are very aware and keenly prefer what we call ESG integration to be added to plan options. Well, that's interesting. Now you're running Voya Investment Management shop there. What do investment managers look at when it comes to ESG? You mentioned one type, what I'll call a type of ESG. How does all that factor in? Because I think labels have this nasty tendency to get broadly affixed to lots of things that don't necessarily fit actually underneath everybody's definition. What do investment managers look for? Right. Well, when you think about ESG and the investment process or making company decisions in a corporate credit, when you think many elements of them has been involved in the investment process for years. What is ESG in investments? It's everything you should consider beyond just the financial statements and disclosures of a company. Impact on the environment and how that may affect, for an energy company, their long-run revenue growth, as an example. Impact on how they're treating employees under S. G, do they have the right sort of compliance and risk and controls in place? When you think about that, if there is an error, fraud within a company, that can have substantial impact on financial results and performance going forward. Again, ESG is pretty expansive. Within ESG, there are a couple of things to think about. Integration, funds that truly are requiring these things were considered in my investment decision versus some other products that we call more, say, impact investing. As an example, Voya Investment Management has a fund focused just on renewable energy. Consider that more of an impact fund. One thing that I do want to just finally comment, and this will link back, Angela, to some things that you were saying about the S, is these considerations do matter. Within Voya Investment Management, we have proprietary scores, and we have ways of looking at data. What's a real example of how we think about it? We actually go buy data, scrape data from millennial or employee engagement websites. Two gaming companies. If anybody has kids, I know I have a few, video games, gaming is a big hit love. By scraping sentiment and employee morale, we were able to pick up on the one gaming company that their CEO's internal ratings from, and you could probably guess some of the websites that do this, you know them well as employers, had gone down. It was a hint to us that something is really wrong, the sentiment. Sure enough, soon after that became public, this particular firm had some discrimination and harassment suits, a lot of problems, and it vastly underperformed the other competitor who had much higher scores. I just want to use that as an example of how do you actually see and get that edge and incorporate the elements of S into an investment? That would be an example. That's a great example. I see Michael reacting to that one. It's like, ooh. Finally something I could come home and tell my kids about, and they're going to think my job's interesting. That was really interesting, Christine. Well, that is fascinating. One of the other things, the way I've looked at it, there's a lot of debate going on these days, particularly in the field of litigation, with regard to the advantages of active versus passive investments. At least for the most part right now, as far as I can tell, ESG is almost by definition, done right active management. There are some attempts to index and things like that, but it's active management. How does that fit into the overall context of things? Because the other thing people always talk about, of course, is that active management is more expensive than passive. How do you bring all that together? Yeah. Great question. When you think about ESG and ESG integration and active management. There are indices out there that publish ESG scores versus active management, and let me tell you where active management really makes a difference. Number one, a lot of it is what is the rate of change of a company? I think sometimes ESG people will think, "Oh my gosh, that means that it's an exclusionary fund," and say, "Voya Investment Management will never buy British Petroleum" No, that's not it. What it is like really engaging companies to see is the rate of change and the trajectory of their ESG scores improving. There's real alpha in that passive investing cannot pick up. Also the activation of leaning in and proxy engagement and working to really state your voice, your opinion, and engage with management around things is really important. We had an example of engaging with an energy-related company where the board of directors wasn't really engaged. The company wasn't really thinking about improving their carbon footprint and doing things. Ultimately, in partnering with other shareholders, ultimately through proxy voting, we were able to get three new board of directors, and the company came back with a really good, thoughtful ESG plan thereafter. Again, it's about engaging, it's about actively seeing how are things changing, and that is why active management is so important relative to just passive funds that might be trading to a publicly available index. You don't want to buy the company only that already has the scores. You want to really proactively engage and buy the companies that are improving. Well, that's a great point. It's interesting because when you talk about some of the things that you're talking about focusing on, the weird thing to me is it's like, weren't we always looking at those? Shouldn't you always have taken into account the risk factors that are out there that might affect the profitability and the revenue flows and things like that? If you've got bad management and something blows up, what happens to the stock price the next day kind of thing. It's interesting in some ways because there's an ESG prism, if you will, through which we're kind of looking at this in a different way. In a lot of respects, it seems to me like we're looking at things, or should be looking at things, the way we always should have been looking at things. We're just maybe more sensitive to some of these new elements now than we perhaps were used to be. It's very interesting. Well, Michael, it's your turn. Of course, one of the things, and it's been mentioned already in the chat room, there have been, I think, what's fair to call some speed bumps along the way with regard to the fiduciary aspects of embracing or taking on ESG in which you review and things like that. I think there was a presentation I gave a while back, and I equated it to Squid Game. The famous red light, green light. That, I think for a lot of plan fiduciaries, that's exactly what it's felt like. You rush forward, and it's like, "Nope. Stop, stop." Then when you try to run away from it is when you have the real problem. What about it? Where do we stand with things? We're again, find ourselves kind of in the middle of things, right? Yeah. What I'm going to try to do, Nevin, in talking about this, is cut through a little bit of the details and try to provide some practical help to advisors that are thinking about this. You're right. I'm sure our audience knows that this is just sort of the latest salvo in what's really a long-running back and forth between Republican and Democratic administrations on the topic of when and how plan fiduciaries can consider ESG investments, as well as other factors in making plan decisions. This is not a new issue. Really what we're talking about goes back to 1974, right after ERISA was passed. Union pension plans were asking themselves, "To what extent can I decide if, among all the investments I'm going to make, to focus on those projects that use union labor?" That's been an issue we focused on for a long time. This latest proposal, I'm going to say a couple of times, Nevin, it's just a proposal, has been reported as a departure from what the Trump administration put out. I just want to make the point that Republican and Democratic administrations, although there's been back and forth, they actually agree on a lot more than they disagree about. For example, any plan advisor smart enough to have joined NAPA and join this webcast knows that when you make investment decisions advising your client or actually making investment decisions, they need to be made using a prudent process focused solely on the interests of the participants and the plan itself. You are not allowed to sacrifice returns for some sort of collateral goal, including a social goal. Of course, within those two restrictions that all fiduciaries face, there's a lot to think about what that means for ESG. This latest proposal, I think, tells advisors really to think about ESG in one of two ways. This is not in my notes, Christine, so I'm going to steal what you just said because I love this way of thinking about it. I'm going to try to take what you said and sort of think about it. Christine's getting a lot of play today from everybody else. The first is the DOL says, "Look, we're trying to communicate as clearly as we can that ESG factors can be just like any other factors." For example, if you are looking at an investment manager strategy and the investment manager says, "Hey, when we look at energy companies, we ask ourselves, how are they positioned to deal with climate change and how energy policy is going to change?" I think that's basically integration. DOL goes out of its way in this proposal to say, "That's fine. ESG is a factor like anything else. You can consider that it's going to have an impact on the risk-adjusted return." Second, DOL is trying to communicate a very difficult thing to communicate, and that is when you're looking at two investments that you might put into your client's venue, there might be two that equally serve the needs of the plan, right? There's lots of great investments out there. Do we all know what's going to perform the best? We're not sure. We know that within a certain amount of diversification, asset allocation strategy, fees, that sort of stuff, there are funds that might equally serve the need. If you have a plan sponsor that comes to you and says, "Hey, my younger employees, this is really important to them. They would like a fund that they can feel comfortable investing in." The proposed regulation would allow you to say, "Look, we found a number of equity funds which meet our investment policy statement, but this one is a X fund, it's a green fund, it's religiously compliant, or it has a more of a focus." The DOL says that's okay for you to do that as long as the investments you're looking at equally serve the needs of the plan and you let participants know what that characteristic is. There are a ton of other details, but to cut through it, that's really what the proposal is trying to get advisors and other plan fiduciaries to think about, is think about ESG in those two ways. Interesting. Okay. Now, when the Trump administration put their proposal out, and then there was a final rule, and then the Biden administration says, "Never mind, we're not going to enforce that. Now we're going to have a new one out." There's been a lot of response to those various proposals. What kind of response did they get? Maybe focus maybe on this most recent one. Yeah. I recall there was a large number. Hundreds of comments. Yeah. I make a couple points there. The first is generally, most people saw it as a positive improvement. Mostly because while I think the Trump administration's final rule did try to avoid some of the worst aspects of their first proposal, there was still a sense, especially among investment managers and advisors, that there was really a foot on the scale against considering ESG as just part of any other factor. I think to that extent, the tone of this new proposal, I think, has generally been received very well. There are some issues on which there was some disagreement, and lawyers like us like to nitpick, right? For example, the extent to which the regulation should actually specifically mention ESG. Some people said, "Look, if it's just like any other factor, why call it out?" Others said, "No, this is really important that the regulators make clear because there's uncertainty that this is perfectly appropriate, like any other factor, to consider in investments." That's really about, I think, lawyers arguing about the best way to make these points. Another issue on which there was a lot of comment and Nevin, an ARA's comment letter sort of goes into this, is how do we correctly express this idea that we can put in place funds to meet participant demand. We have to do so with funds that we believe are otherwise prudent, can't sacrifice returns for collateral goals, and exactly how do you describe the process to make those decisions and the extent to which you need to provide special disclosures to participants about it? There's a lot of nitpicking about the right way to do that. The last point I'll make is there's one comment letter that's worth mentioning, and that is a comment letter from the Capitol Hill. In particular, there was a letter sent from some Republican senators expressing concern about this latest proposal. For example, in their view, it could be read to require the consideration of ESG. Whether or not they're right about that, I'm not going to second-guess members of the Senate. What I will say is that unfortunately, this means that this has continued to be somewhat of a political hot potato, unfortunately. It really highlights how hard it is for the regulators to come up with a way to say in legalese all these principles that we all agree on, that this is really important, it can affect return. We also don't want to give people carte blanche to sort of use plan assets for whatever they want. Right? You have to have this balance, make sure you're understanding how it can affect return, and adequately protecting participants. I'll end, though, by saying most of the comments on the latest proposal were positive. Because particularly the tone, and the way that it reflected this sort of new thinking about ESG that you heard from Angela and Christine. Okay, great. Thanks. Christine, since we've got you here and you're looking at this from an investment management standpoint, what's Voya's take on this proposal? Yeah. We provided a comment letter and we're quite excited. We really think that this is a step in the right direction because as we said earlier, it matters to participants. I think it can positively impact savings rates to have value-aligned options available. We need to move forward. I would tell you, I think we had even one just kind of a live example a few years ago. We had one with a DC sponsor, very ESG leading company, who wanted us to create an ESG-informed target date fund. Afterwards, they had to put everything on hold because the regulations were so murky and there just appeared to be too much risk and ERISA and all this stuff that they stopped in their tracks. Any clarity we can get out of regulators so that our clients, people overseeing DC, advising DC, can have more clarity around these options, I think that's wonderful. I'm quite keen to see this go over the finish line. Well, clarity is a good thing. I think that's the other thing. We've been dealing with this issue for a long time under what's I think affectionately Michael called sub-regulatory guidance, which is something only Hill insiders can really appreciate. The rest of us think, "What does that mean?" Now it's at a different level and it's got some visibility and I think Christine, to your point, clarity. One way or another, clarity would be helpful because I think plan fiduciaries have been left with this kind of feeling that things are kind of murky and not really comfortable which way to step off. It's like finding yourself in the middle of a minefield and saying, "I'd better just stay where I am because I don't know where the mines are, but I don't want to accidentally find myself on one of them." Great. Thank you very much. Mr. Nelson, saved the best for last. Potentially anyway. No. I know you've been a big proponent on this for a long time. I remember you and I have had more than one discussion about it. Fascinating discussions, actually. How ultimately can intermediaries and plan sponsors differentiate themselves these days with regard to all this attention and focus and things being talked about? Well, first, I would say I think intermediaries and plan sponsors can differentiate themselves by recognizing ESG in a broader context. As Angela pointed out, there's a connection between ESG and how you run your business, you treat your customers, you treat your employees, and your responsibility within the community. To Christine addressing the investment dimensions of it. Also then coming back to how it fits in a benefits context. Second is to understand the connection between these things, between ESG, DEI, and benefits. That they're not separate, that it's not just all you can apply ESG principles to your benefit programs, and not necessarily have ESG funds. That could be a step along the way or a portion of it. You can take steps to embrace it with your DEI program. Maybe step 1, embrace it and develop policies at a business level. Third level is employers can differentiate within their benefit package by designing their benefits with ESG principles. I can talk more about that in a moment, but it really is trying to find a way to better attract and retain employees. It doesn't have to cost more. In fact, it may even be more cost-effective in the long run. For intermediaries, they can differentiate themselves, certainly, by having the conversation, by educating employers about the benefits of DEI and ESG principles applied to a benefits package. Hmm. Interesting. Okay, we've got advisors on the call here, we're all kind of circling around this ESG topic and how to go with it. I know when we've surveyed advisors, in fact, as I recall, our most recent survey, about half of the respondents basically said, "I'm waiting for the plan sponsor to bring it up." If I'm an advisor and I want to start this conversation with the plan sponsor, how do I do that? How would you suggest I do that? Where do people come in? Nevin, you're exactly right. We've both heard, "Well, I'm going to wait until it comes up. My clients aren't interested." It's interpreted that they're not interested because they haven't had a conversation around it. This applies to both prospective clients as well as existing clients. I think it works and is needed in both situations. As an advisor and before you start the conversation, I think every advisor that I'm familiar with will always do a little research on who they're contacting or their existing customer. You got to know a little bit about the demographics or even ask the employer about the demographics. The age, the gender diversity, ethnicity. Just get a sense of things. Understand the labor challenges and the benefit challenges the employer's having around attracting and retaining employees. These are all the things that DEI and ESG, applying these principles to benefits will solve. Once you've kind of started to tee things up, you simply can really just have a conversation with the HR or the benefits individual and say, first, I would probably ask more, "Have you thought about or do you have a DEI program?" Maybe just start there. "Oh, yeah, we thought about it," or, "We do have one." Okay. It gives you a chance, "Tell me about it," and you can kind of get that going. The employer, even if you're with the HR and benefits, has the C-suite talked about or asked or thought about an ESG with their investors or with customers? Are you getting an asset? Just talking about trying to get the connection between what customers are asking about, maybe even what investors are talking about, bringing that back together to the benefits. As Angela and Christine and Michael addressed, ESG is certainly good with the customers. It's good for employees. It's good for investors in the community. One of the greatest things, this will be a shameless plug for you and NAPA, Nevin, I really admire, and I think you guys have done a nice job with the NAPA ESG(k) Certification. What you're doing with advisors to help train and educate them on what are the right questions to ask, gaining a greater proficiency around some of the principles and thoughts around ESG. It's a great program, I really encourage advisors to take advantage of it because there's some places there on learning on what are the questions to ask at a deeper level than we can go into in a brief webinar here. I appreciate the shout-out and the acknowledgement. While we're at it, I should just mention we're having a boot camp, an ESG(k) boot camp at the upcoming NAPA 401(k) Summit, April 3rd through the 5th in Tampa Bay, Florida. napasummit.org. Okay. Angela, I'm going to circle back a little bit with what Charlie was saying there because, aside from the fact that you're nodding your head repeatedly, you were mentioning earlier how this kind of concept and approach has shown up in even RFPs and things like that now. Absolutely. People are proactively asking these kind of questions about how you as an advisor or as an investment management firm, how are you doing business, right? Absolutely, Nevin. I've been doing this work for 20 years now. Before Voya, I was at Coca-Cola doing sustainability work. It is the case that it is now part of the common vernacular of RFPs. While it may not be written, "ESG, what is your ESG program, and what are the details?" What it is, "Talk to us about your supplier program. Talk to us about your environmental stewardship. Tell us how many diverse suppliers are part of your ecosystem. Tell us about the demographics of your board of directors. Are those board directors independent? If so, how many? What is the average tenure of your directors? What is your executive committee or your senior-most management look like? What are the levels, the different individuals in terms of demographics at various levels?" Very detailed, sometimes questions around some of those social dimensions. From a governance perspective, of course, this is going to be part of RFPs. In terms of the data privacy, in terms of the security, in terms of, again, where does the different board committees, how do they interact and engage? ESG is about not only risk mitigation, but also opportunities. How do you take what you do well and apply it in a way that's actually benefiting society and your business system, right? As part of that larger society. It is all throughout RFPs, particularly when we're talking about the public sector. It is an important and key component of those RFPs. That's an excellent point. I think I've heard somebody say at some point that, whereas people used to view the concept of SRI, socially responsible investing, as being exclusionary, that ESG is really about not so much what you exclude, which is what you've just said, but about what you include and what you're looking to bring in. It's an add-on, not a subtract from kind of approach and mindset. Well, Charlie, it seems like a great point since you were nice enough to tee up the NAPA and give me an opportunity to tee up the summit. Talk a little bit about this really innovative program that you all have entered into about getting to be an ESG-certified plan. What is that about? What does it mean? How do you do it? Well, DALBAR has really advanced this. It's less Voya. We've put our plan in to be certified as for Voya employees and one of the first public traded companies to be certified. DALBAR has created a retirement plan certification that evaluates a plan's success in actively applying ESG principles to its retirement plan. It's not necessarily exclusively about investment options. It's looking at it in the broader context of ERISA and ESG, where ERISA best practices are kind of the baseline, and then ESG principles are kind of overlaid, if you will or imposed upon that. E could be, I think someone mentioned paper suppression, auto-enrollment, online capabilities. S, for the social, your match structure, withdrawal options, pre- and post-retirement education programs. Governance, this is one where it's really key with advisors. It's about third-party review oversight. Advisors are that third-party review oversight to make sure that the plan's being administered and designed appropriately for all employees and the reasonableness of fees and compliance with regulations. I think the E, the S, and the G, just applying that to how you approach your retirement plan and then getting a certification from DALBAR on that. It says, I can advertise that with my employees. That may help me attract and retain. It's very minimal if any cost there for a plan to be able to adopt that. You got something you can then market. As an advisor, I now have something that I can talk about that I've got so many ESG-certified plans. Like I say, I think the G part with a third party measuring that you've got third-party review oversight is very key for advisors. That's awesome. Well, we have just a couple of minutes, and we do have some questions queued up, and I want to encourage everybody again, if you've got a question, whether you have time to get to it or not, we're going to share it out with folks. These questions, Christine, I'm going to be inclined to lean in your direction. I don't want to preclude anybody. For all I know, Michael is a closet investment guru. Some of this stuff is a fiduciary aspect to it. I'll just tee it up, and whoever wants it grabs it. Question, when it comes time to evaluate an ESG fund in a plan, would good governance suggest evaluating it in comparison with an ESG benchmark or a traditional non-ESG benchmark? How are you going to measure it? Yeah. Great question. A couple of these, Michael, I think we'll tag team because you're certainly the fiduciary expert here. I would say, actually, a couple of things. A little bit of both. What I mean by that is certainly, when you're selecting your plan option, let's just say it's an ESG target date, you're really going to want to consider what is being incorporated that's above and beyond the standard traditional, and how is it being measured by the manager and what sort of reporting. When you long run are tracking the success of, is this delivering what you thought it would be? I would say you would want to consider versus the plan that is not ESG aware. Specifically, if you want to see is that manager delivering ESG alpha related to, say, Sustainalytics or MSCI or some other kind of publicly available data. You absolutely can do that as well. Michael, I'd love your thoughts as far as from a fiduciary standpoint, how you would handle the subtlety of the really good question. You know I'm going to give you a lawyer answer. A lawyer answer is a good fiduciary has good process. Right? I think there's no necessarily 1 right way to do this, but I'd make 2 points. One, as I said at the beginning, ESG can just be part of any other factors. Measure that investment against what you're trying to achieve as part of the overall portfolio. The second point is lay out what you're doing and stick to it. An investment policy statement can kind of lay this out. Lay out what you're doing, stick to it, have good conversations at the committee level. As a result, there really shouldn't be 1 right way to do it. Again, you're trying to ask yourself, what am I trying to achieve that's consistent with the plan's purposes? One of which might be we want participants to be happy and contributing to this plan. Write it down and be consistent with that process. Always keep in your mind what I'm trying to achieve is good outcomes for participants in the way that I set up my process of evaluation. Wow. That was an actual answer and very succinct. Thank you for that. Let me slide in one more question, and I'm probably responsible for this coming up because I mentioned SRI, the socially responsible investments, and I wonder if anyone wants to try take a whack at explaining the difference between SRI and ESG funds. Anybody want to take a stab at that? I realize it's tough because it's a generalization, but anybody? Yeah. Michael, you might be the real expert on the nuances between SRI and ESG. I think ESG is a little bit more broad-based when you think about the concept of everything that it really captures in. I think SRI tends to be a little bit more oriented on exclusionary investing, sort of impact some of the things that we've talked about. That's how I see it. Would love the view of- Michael as well. Yeah. The only thing I'd add is sort of thinking about those two ways that the new proposed regulations think about ESG. That second group where you're sort of doing what, Christine, you called impact. That matches up a little bit more with SRI. You're sort of saying: We want to offer a fund that has a social impact, right? That's the reason we're offering it. I like to use religiously compliant funds, right? That's offered because you're trying to meet a particular participant need. You can do that. That's okay as long as you're not sacrificing returns, and there are some other requirements in the reg, as I said. I think what the proposed regs are trying to do is tell fiduciaries, ESG generally, that is just like any other factor. It's perfectly appropriate and understandable that you would come to the conclusion through your prudent process that they would affect the risk or return of an investment. Wow. That's two for two. Awesome. Thank you all so much. I'm so impressed. We covered a lot of ground. We did it within the allotted time. Trust me, I take no credit for that at all whatsoever. You guys have been a great panel. Lots of great information today. Thank you all for being part of this, and thanks to Voya for sponsoring it today. Thank everybody for dialing in. Let me hand it back to Marissa to take us home. Thanks so much, Nevin. All right. Thank you to all of our viewers and especially thank you to all of our panelists. You all were wonderful. Really appreciate that presentation. If you have any further questions or we did not get to your question, go ahead and enter it in the chat box I'm sorry, the question panel, and I'll forward those to the speakers. We would appreciate it if you could please take a few moments to complete the short survey that's going to pop up on your screen when you disconnect. We value your opinions and take them into consideration when planning future webcasts. On behalf of the speakers and our whole team here at NAPA, I'd like to say a final thank you for joining us in this presentation today. You may now disconnect. Thanks.